Will 2012 be the year of “come together” consolidation for Islamic banks?

Size is often the justification for achieving economies of scale, used to access deals for league table prominence, used as a buffer in a challenging environment, used as defensive measure to ward off unwanted suitors, and so on.

Islamic banks are very much like Islamic (equity) funds. There are hundreds of Islamic banks and funds, but the paid-up capital and assets under management, respectively, is too small to be meaningful. Yet, both, more so Islamic banks, present a unique situation (of an industry risk) of “too small to fail”.

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Deleveraging in EU banks is one of the many issues impacting the ME economies in the 2012. Tourism, trade, investment and oil exports could also suffer as the EU crisis unravels.

All eyes are fixed on the European Union these days, as the region remains mired in a sovereign debt crisis that threatens the very future of the economic bloc. READ MORE HERE

Deutsche Bank is bullish about next year, i.e. if Europe does not capitulate, the United States does not return to its poor growth and Asia does not suffer a hard landing.

In the eyes of Deutsche Bank analysts, Europe holds the key to global growth. Admittedly, this is slightly myopic thinking given that the world does not revolve around the EU. We have already seen the United States and Asia chug along even as Greece, Portugal, Spain and Italy imploded one after
the other. Perhaps that’s a natural home bias of all OECD banks. READ MORE HERE

openDemocracy /Foter

By Alon Ben-Meir

In the wake of the Arab Spring and Prime Minister Erdogan’s championing of political reforms throughout the Arab world, it has now become more urgent than ever before to find an equitable solution to the Turkish-Kurdish conflict. Short of finding an immediate resolution to this debilitating struggle will not only severely compromise Turkey’s suggested model of successfully combining Islam and democracy, but it will additionally bankrupt its moral standing as it willfully continues to discriminate against 15 million Kurds who represent one-fifth of its population.
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• 25 Rapid Growth Markets (RGMs) to grow by an average of 6.2% this year and by 5.9% in 2012, compared with 1.6% growth for the Eurozone this year falling to 0.6% next year.

• Qatar had the highest nominal GDP (US$) per capita at PPP in 2010 among the 25 RGMs and has also been the fastest growing economy over the last decade, with an average growth of 13%.

The dynamics of the global economy have changed with a new set of fast-growing markets challenging the position of the established advanced economies. The rapid growth markets (RGMs) are expected to grow collectively by 6.2% this year, almost four times more than the anemic growth expected in the Eurozone according to Ernst & Young’s new quarterly Rapid Growth Markets Forecast (RGMF).
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The next bubble may be forming in developed sovereign debt

The October 2011 edition of Barclays Wealth Compass, entitled “Perspectives on Markets: Yesterday, Today and Tomorrow,” reflects upon the past two decades of market volatility with an eye toward understanding and positioning for the future. The firm’s chief investment officer and heads of regional Investment Strategy, Behavioural Finance and Quantitative Analytics answer five key questions in the special edition.
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The EU and the US economies are not the only headaches for Middle East economies. China’s faltering economy could also hurt the region’s growth prospects.

As the advanced economies were contracting and falling behind earlier in the year, the Gulf and the wider MENA states were hoping Chinese and wider Asian demand to ensure their oil production finding eager buyers. READ MORE HERE
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Robust and timely support from the Gulf central banks have made the region’s key financial institutions secure and safe powerhouses.

Their strength is in sharp contrast to the banks of the OECD, especially the European banks which are facing a calamitous future especially if the sovereign debt from Greece and other EU states blows up in their faces. READ MORE HERE

UBS believes that the euro is fundamentally flawed and hurts most of its members and they would be economically better off if they had never joined. But like Hotel California, you can check into the euro any time you like, you can never leave…… READ MORE HERE

Ousting Moammer Gaddhafi may have been the easy part as the National Transitional Council mulls over the next steps to restore domestic stability and investor confidence back into the state.

The slate has not exactly been wiped clean, but it is the dawn of a new era in Libya. With Colonel Moammer Gaddhafi a fugitive in the country he ran with an iron fist for 42 years, the Libyan rebels’ National Transitional Council (NTC) has quickly emerged as the legitimate group running the country in the interim. READ MORE HERE
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Saudi Arabia is not immune to the debt crisis in the European Union.

“A default that involved Spain and Italy would almost certainly lead to a seizing up of eurozone — and quite possibly global — interbank markets,” says Saudi-based Samba bank.

“Even if the financial shock was confined to the zone itself, European demand for raw materials and manufactured products (mainly from emerging markets) and services (mainly from North America) would shrink dramatically and this would be enough to imperil the global economic recovery.”
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While the U.S. oil sanctions on Syria are welcome, the world can inflict a much bigger blow to Bashar Al-Assad’s regime if its biggest customer — the European Union — shunned its crude exports too.

It has become a grim but almost familiar sight on TV: unarmed Syrian protesting against the government on the streets, only to flee at the sound of gunfire from Syrian forces - a few minutes later lay bodies on the streets. READ MORE HERE